December 11, 2011
Especially with the 2012 elections coming up and the Occupy movement, there is a lot of talk about taxes, mostly about taxing the rich more, as it always is. CNN reports "To Obama, the fact that the wealthy can so whittle down their tax burden is 'the height of unfairness.'" This is silly, for two main reasons. First off, if the rich can whittle down their tax benefits, congradulations to them, I see this no differently than I see the company that can produce their product at a lesser costs and enjoy more profits (which we have already discussed on many occasions why companies that can do this should not be punished because they made 'too much profit"). Second off, there's that word fair again. We constantly discuss in class what are we striving for? Fair is arbitrary because the question fair to who? cannot be answered (in a non-sarcastic way). I cannot help but think about to Mises (I believe) who explained that people wanted socialism not because they thought it was a better theory, but simply so that those that were more well off than they were could suffer the same as them. Also, I think about how at a certain tax level people either begin working less so they don't reach that tax level and can keep more of their earnings or they simply begin working out of sight of the government so they are not taxed. Either way, it is possible to be a greater loss in tax revenue then if they had not raised the tax rates. Also, Hayek is absolutely correct when he tells us that there is no way to keep these arbitrary taxes from getting out of hand, "But is there any principle which we can hope will be adopted and which will prevent that the opportunity thus opened will be abused? It is hardly to be expected that an attempt to limit the scale of progression to some particular maximum figure would, in this respect, be effective. Such a percentage figure would be as arbitrary as the principle of progression itself and would be as readily changed when there was need for additional revenue." (pg 283) If only people would rethink their desire for 'fairness' and 'efficiency' then perhaps we could start replacing the bad ideas with good ideas as Mises suggests we should do.